3 WU Employer Assisted Housing Program Highlights Forgivable loans for qualified WU employees and graduate students Up to $5,000 at closing or 5% if under $100,000 home sale price May be used for either down payment or closing costs Can only be used once, limited to a first-come, first-serve basis Home must be located in one of the redevelopment neighborhoods

7 Qualifying 4 C s of Lending Capital (savings) Do you have enough cash for the down payment? Do you have enough cash for emergencies? Capacity (income) Can you repay the debt? Character (credit history) Will you repay the debt? Collateral (house) Will the lender be fully protected if you fail to repay the loan?

8 Glossary of Terms What Lenders Look For Debt to Income Ratios Relationship between current consumer debts and current income Determines percentage of income available for mortgage payment Determines program qualification Down payment The higher the down payment, the lower the loan amount Reserves How much money do you have saved? How much will be left after closing?

9 Glossary of Terms What is MI and LTV? MI Mortgage Insurance protects the lender against borrower default PMI is mandatory on any conventional loan that exceeds 80% Loan to Value (LTV) The borrower may request the cancellation of PMI when the loan reaches 80% LTV (either through appreciation of the property or reduction of principal) LTV is a ratio calculated in the following way: Loan Amount Sale Price

13 How Much Can You Afford? Add All The Payments Together Purchase $150,000 condo with 100% financing. Current Market Interest Rate for the loan is Principal and Interest Payment from the chart Condo Fee Property Taxes $75.00 per month ($ annual) Hazard Insurance $90.00 Total the payments $75.00 $ % $948

16 Types of Mortgage Products 30 Year Fixed Mortgages the rate is fixed for 30 years. Benefits include guaranteed protection from loan payment increase for the life of the loan Disadvantage is a higher interest rate This loan is perfect for somebody looking to stay in their home for more then seven years A.R.M. Adjustable Rate Mortgage The rate stays constant for a period of typically 3, 5 or 7 years and then adjusts according to an index Benefits include a lower monthly payment for the initial fixed period Disadvantage is that the interest rate will start fluctuating after the initial period

19 Loan Programs Simultaneous Second Mortgages Objective is to avoid MI when you do not have 20% down payment First mortgage is for 80% of the sale price The second is amortized for 15 years

20 Credit Your Credit Score & How a Lender Uses It The credit bureau risk score is a summary of the information in your credit file Scores range from Score ranks consumers according to risk The higher the score, the lower the risk of default Scores assess past bill paying history to predict future behavior Scores are used to perform a risk analysis which helps predict the likelihood of loan repayment

21 Credit Common Credit Problems Multiple credit cards used to their limit Obtain new credit when existing debts remain unpaid Pattern of late payments on current debts Charge-offs Bankruptcies Judgments Foreclosures

22 Credit Solving Credit Problems Pay off or pay down debts Resolve unpaid debts Write letters to credit bureaus for corrections Settle with collection agencies Phone and utility companies make frequent mistakes and report them on your credit These mistakes cost borrowers a lot of money

23 Steps to Buy a Home Get Ready to Buy Get a REALTOR Find a Lender for Preapproval Search for a home Submit a contract to the Seller Prepare to Close Get a home inspection Meet Lender s conditions Close on the property

28 St. Louis Metro Area 33% increase over the next 10 years. Median Price of Existing Single-Family Home Source: Moody s Economy and Forbes

29 St. Louis City Neighborhoods OTHERS

30 St Louis County OTHERS

31 OTHERS Hwy 40 Construction

32 Needs Assessment What do you require in your next home? And what additional amenities would you like to have? Distinguishing between needs and wants will be important as we travel together toward your next home purchase. Let s be sure to OTHERS discuss the following items, and where you d rate their importance: Location Price range 75% Lifestyle Short term/long term goals Style/architecture Schools Neighborhoods Space and size

Homebuyer Education: What You Need to Know Today s Objectives Prepare your finances for home ownership Steps to mortgage prequalification Shopping for a home- who are the major players? Choosing the correct

Preparing for homeownership What we ll cover 1. Getting ready for homeownership 2. Mortgage basics 3. What you need to buy a home 4. Finding the right home 5. Resources 2 Getting ready for homeownership

GLOSSARY COMMONLY USED REAL ESTATE TERMS Adjustable-Rate Mortgage (ARM): a mortgage loan with an interest rate that is subject to change and is not fixed at the same level for the life of the loan. These

MORTGAGE TERMS Acceleration Clause This is a clause used in a mortgage that can be enforced to make the entire amount of the loan and any interest due immediately. This is usually stipulated if you default

Mortgage Terms Glossary Adjustable-Rate Mortgage (ARM) A mortgage where the interest rate is not fixed, but changes during the life of the loan in line with movements in an index rate. You may also see

STUDENT MODULE 10.3 RENTING VERSUS BUYING PAGE 1 Standard 10: The student will explain and compare the responsibilities of renting versus buying a home. Buying a House Hank and Peggy decide it is finally

We ll help you open the door. The Citizens Guide to Home Financing Lori Customer Table of Contents Before you look 4 The costs of purchasing a home 4 Getting a head start: Pre-approval 6 Choosing a mortgage

Mortgage Glossary 203(b): FHA program which provides mortgage insurance to protect lenders from default; used to finance the purchase of new or existing one- to four family housing; characterized by low

Glossary A Adjustable Rate Mortgage - An adjustable rate mortgage, commonly referred to as an ARM, is a loan type that allows the lender to adjust the interest rate during the term of the loan. Generally,

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CITY OF MURFREESBORO AFFORDABLE HOUSING ASSISTANCE PROGRAM POLICIES AND PROCEDURES 100. Purpose The Murfreesboro Affordable Housing Assistance Program (the Program) encourages homeownership for low-income,

Fifth Third Home Buying Guide A Guide to Residential Home Buying. Important Contacts and Numbers. Use this page to record important information as you move through the homebuying process. Realtor/Builder

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Real estate terms and definitions Annual Percentage Rate (APR): The total yearly cost of a mortgage as expressed by the actual rate of interest paid. The APR includes the base interest rate, points and

Your Own Home Welcome 1. Agenda 2. Ground Rules 3. Introductions Your Own Home 2 Objectives If you are a pre-homebuyer: Explain the advantages and disadvantages of renting versus owning a home Identify

Guide to Mortgages BUYING A HOME BUILDING A HOME REFINANCING Trust People First For Your Mortgage Needs People First is committed to providing our members with quality mortgage products that are both competitive

Shopping for a Mortgage? FHA Improvements Benefit You FHA Insured Mortgages Realtors and FHA: Partners in Homeownership National Association of REALTORS FHA REALTORS AND FHA WORKING TOGETHER TO HELP PEOPLE

Fin 5413: Chapter 8 Mortgage Underwriting Some Basic Mortgage Underwriting Questions Who should you grant a loan to? How do we determine the appropriate interest rate for a loan? What is the maximum dollar

PLANNING AND DEVELOPMENT DEPARTMENT HOUSING AND COMMUNITY DEVELOPMENT DIVISION CALHOME MORTGAGE ASSISTANCE PROGRAM GUIDELINES PROGRAM OVERVIEW The CalHome Mortgage Assistance Program is a program funded

REAL ESTATE BASICS Affordability Analysis An analysis of a buyer s ability to afford the purchase of a home, reviews income, liabilities, and available funds, and considers the type of mortgage a buyer

Founded in 1951, the National Foundation for Credit Counseling, Inc, (NFCC), through its Member Agencies sets the national standard for quality credit counseling, debt reduction services, and financial

HOMEPATH BUYERS GUIDE WWW.HOMEPATH.COM Buyers Guide Buyers Guide For a Fannie Mae-owned Home Whether you re buying your first home or your fifth, the experience can be exciting, confusing, overwhelming

HOME BUYING MADE EASY Know what you need to get it right. HOME BUYING MADE EASY PNC, PNC AgentView and Home Insight are registered service marks of The PNC Financial Services Group, Inc. ( PNC ). PNC has

HOME BUYING MADE EASY Live the dream of owning your own home. HOME buying Made Easy PNC, PNC AgentView and Home Insight are registered service marks of The PNC Financial Services Group, Inc. ( PNC ). PNC

Glossary of Terms 203(b): FHA program which provides mortgage insurance to protect lenders from default; used to finance the purchase of new or existing one- to four family housing; characterized by low

Glossary of Terms Here are some helpful definitions to common terms. 1003 Loan application 4506 IRS form requesting copy of tax return Abstract of title A historical summary provided by a title insurance

Young Alumni Network Webinar How to Purchase Your First Home Presented by: Mike Graves Residential Wholesale Mortgage What to consider when looking to buy your first home? 1. Long term investment: 5 years

Mortgage Terms Acceleration The right of the mortgagee (lender) to demand the immediate repayment of the mortgage loan balance upon the default of the mortgagor (borrower), or by using the right vested

1 Applicants with a good credit report will be in a stronger position to negotiate best rate and terms Your credit report is used by banks and other lending institutions to determine your creditworthiness.

Glossary Adjustable Rate Mortgage (ARM) a mortgage with a variable interest rate, which adjusts monthly, biannually or annually. Amortization the way a loan is paid off over time in installments, detailing

Your Guide To Home Financing You re buying your first home. We have an easy mortgage solution. When buying a home, the world of mortgages can be intimidating and overwhelming. The key to feeling good about

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Actions to Take Before Buying a Home Today As the housing downturn has shown, homeownership is about more than buying a home you have to make sure you can keep the home over the long term. If you re thinking

How Mortgage Insurance Works A GUIDE FOR LENDERS 2 What Is Mortgage Insurance? It s a financial guaranty that reduces the loss to the lender or investor in the event the borrowers do not repay their mortgage

Financing Your First Home A Guide for Homebuyers By Irene Moustakas www.loansbyirene.com Irene@LoansByIrene.com 408.257.1681 4/1/2014 Financing Your First Home Table of Contents The Basics of Underwriting...

A mortgage is a loan that is used to finance the purchase of your home. It consists of 5 parts: collateral, principal, interest, taxes, and insurance. When you agree to a mortgage, you enter into a legal

13 DOWNPAYMENT PROGRAMS DOWNPAYMENT ASSISTANCE PROGRAMS These guidelines apply to all downpayment assistance loans offered at the Commission Details for Home Advantage Downpayment Assistance Program can

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